We need supply competition, not just people paying their own money, to get innovative and lower cost health care. People paid their own money for taxis, but hailing a cab to the airport on a rainy friday afternoon was still no picnic. It took supply competition, in the form of Uber, to give us better service and lower costs.

The mergers of health insurance companies under the protections and regulatory fixed costs of Obamacare are, obviously, a step in the wrong direction. Three big, politically connected, health insurers, 6 big, politically connected banks, and you see where our economy is going.

Your thesis seems to be that there are two ways to improve the health care system: (1) address regulation or (2) "something clever" like Uber or Southwest Airlines.

However, Uber was not possible until the invention of the cell phone, the development of cell phone apps and the wide acceptance of social media. You couldn't have done Uber in 1995. Perhaps "something clever" will have to wait for a breakthrough elsewhere.

You alluded to having your xrays read in China using "apps". How do you get your images done so you can send them to China? Maybe some day there will be an xray attachment for your phone that will allow ultimate selfies (first we have to do away with those annoying regs that limit the use of ionizing radiation and open it to everyone) but for now you need a physical facility. What has been Uber-ized is only the professional component. A radiologist in Australia or India can read your xrays, and chances are that at night the American radiologist is sleeping soundly while the Aussie radiologist is reading your emergency films taken in Philadelphia over morning coffee. Why didn't we do this 20 years ago? It wasn't due to a lack of qualified radiologists halfway around the world. We had to wait for Al Gore to invent the Internet and then others had to figure out broadband, loss-less compression, and image digitization.

Let's explore your analogy further. You're comparing the taxi system to the health care system, but the proper pairing is the "transportation system" vs the "health care system".

While Uber addressed the cost of taxis it didn't address the cost of driving, or in larger terms, the cost of "the transportation system". Uber didn't take on car dealers, tire stores, auto insurers, and gas stations, and it certainly doesn't have an impact on freight trains and airlines. It addresses one aspect of "the transportation system". The larger problems, such as oil dependency, road congestion, highway maintenance, pollution, traffic fatalities and (if you're intellectually so inclined) global warming are not addressed at all by Uber. Uber might even exacerbate some of those problems by putting more cars on the road.

Uber might revolutionize taxis just like the Internet has revolutionized reading xrays, but there's a difference between a component and the system in which it works. Replacing vacuum tubes with transistors was a big step, but it did not create 1080p cable TV overnight.

So the monopoly taxicabs had no method of contact pre-smartphone? No, you miss the point with smart phones. What they enabled was adoption so fast that the political crony system had no time to react and stop Uber before the public was able to discover what they were missing under a state-protected monopoly. Twenty years ago you could have just as easily used a land line to call a switchboard somewhere that maintained a list of drivers who would call me and dispatch me. But such a system would have taken time to set up, would have physical target that could be blocked via the phone company. As usual, government is the problem, not technology.

Uber works so well because anyone can drive a car. But it's not true that anyone can give you a blood test or examine it. People pay for reliability and expertise. Uber is an industry that requires no expertise.

I agree, we need more Ubers - but talk is cheap and agreement is the easy part. The tough nut to crack is how to give consumers confidence that supposed experts are actually experts and pricing 'fairly'.

So many of the industries that need to be broken up also require physical capital, not just expertise. Ok, so we got our blood test results from the guy who works out of an apartment above Christian's Pizza on the walking mall. Now how does the Bangladeshi lab tech who recently graduated analyze it on the cheap without his equipment?

Or, how does the mechanic who just joined the RepairPal network inspect my corroborator without something to lift the car up on?

The markets that need the most disruption (hint: they're all about asymmetric information) are the ones that require physical capital and trust. I don't know how an app can fix that, but please, do share. As a developer, I think often about these questions!

Actually, I wish I were a primary care doctor. I would open up shop in a red state that has chosen not to expand Medicaid. I would be a cash only doctor's office. No insurance taken. My customers would be those who make too much to qualify for standard medicaid (not the ACA expanded medicaid) and those who couldn't afford (or didn't want to buy) plans on the exchange. I would post prices for all of my services. I would create packages and bundling to reduce costs. I could maybe even charge a monthly or yearly subscription fee that would include a year's worth of doctor's visits, immunizations, etc. I think this idea would slowly undermine the crap that is the ACA (and the current healthcare system in general) and free up people to pay cash once again for regular doctor services...Ultimately, the solution should be: no more insurance for basic medical care; just insurance for catastrophic illness/injury.

And you'd hire nurse practitioners to do a lot of work, contact by email and internet/skype, and so forth.

I will be curious to hear from real doctors about the legal and regulatory barriers you would face in setting up such an office. Especially if you want to get past initial visits and actually treat patients.

Yes, I would agree on the nurse practitioners. But this model might even provide enough income (you no longer need to pay an office full of people to do your insurance junk) that you have time to spend with individual patients. However, I have found it very useful to have a nurse practitioner available for phone calls in order to ask whether or not I *should* seek a doctor's advice before wasting time making an appointment.

Thanks to a few abusers I am now moderating comments. I welcome thoughtful disagreement. I will block comments with insulting or abusive language. I'm also blocking totally inane comments. Try to make some sense. I am much more likely to allow critical comments if you have the honesty and courage to use your real name.

About Me and This Blog

This is a blog of news, views, and commentary, from a humorous free-market point of view. After one too many rants at the dinner table, my kids called me "the grumpy economist," and hence this blog and its title.
In real life I'm a Senior Fellow of the Hoover Institution at Stanford. I was formerly a professor at the University of Chicago Booth School of Business. I'm also an adjunct scholar of the Cato Institute. I'm not really grumpy by the way!